7 Rules of Investing: There are many ways to grow money in the world of investing. People invest money in different options like stock market (equity), bond (debt), mutual funds according to their risk appetite and needs. But just investing is not enough, it is necessary to invest after understanding the right method and rules.

However, the most important thing is that the entire money should not be invested, but some part should be reserved for emergencies. Keeping this in mind, 7 formulas have been mentioned here, which help in understanding and giving the right direction to investment.

Rule of 72 and Rule of 114

According to Rule of 72, it can be found out in how many years your money will double. To use this formula, 72 has to be divided by the rate of return. For example, if somewhere you are getting returns at the rate of 12% per annum, then your money will double in 72/12 i.e. in about 6 years.

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Rule of 114 instrument is used to know in how much time money can triple or more. For example, if you are getting returns at the rate of 12%, then the money invested in it can reach 144/12 i.e. around four times in 12 years.

50-30-20 and 100 minus age rule

Under the 50-30-20 rule, 50% of your earnings should be spent on your needs, 30% on your hobbies and the remaining 20% ​​on savings. This rule usually creates a balance between spending and saving.

The 100 minus age rule tells how much money should be invested in equity and how much in debt as per your age. If the age is 30 years, then it is considered right to invest 70% of the money in equity and the remaining 30% in debt.

Investment and emergency fund rules

Minimum 10% Investment Rule says that at least 10% of your income should be invested every month for long term and it should also be increased at the rate of 10% every year. This creates a bigger fund in the long run.

According to the Emergency Fund Rule, there should be some fund in it which can provide support in any emergency. There is no fixed rule as to how much this fund should be, but it should have money equal to at least 6 months’ expenses, so that there is no problem in case of sudden job loss or illness.

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